Pondering retirement? Try it in phases

07/12/2013 @ 1:48pm

Is farming a profession or a lifestyle? The majority of farmers are likely to say the latter.

That makes a topic and life transition like retirement something of a tough topic for a lot of farmers. It makes the prospect of stepping away from the daily work on the farm something of a quandary for many; does doing so mean you're altogether changing your entire lifestyle, or is there, in fact, "life after farming?"

The majority of farmers in the U.S. today are nearing what's considered typical retirement age; the average age of Successful Farming magazine readers, for example, is 56, according to Successful Farming research. Farmers over the age of 65, according to the latest USDA Census of Agriculture, comprise the largest demographic growth area, and that segment's rate of growth is only sharpening.

"The fastest growing group of farm operators is those 65 years and over," according to the 2007 USDA Census of Agriculture. "In 2007, there were 54,147 operators under the age of 25 and 289,999 operators 75 years and over."

So, farmers -- like everyone on the planet -- are aging. That means the inevitable question of whether or not to hang up the work gloves and tractor keys is on a growing number of farmers' minds.

"Moving off the farm. It's my idea," says Farm Business Talk veteran advisor sw363535. "I am getting close to that age (whatever that age is) and for some health reasons, I am diminishing my leadership role at the farm.

"What did you do to make it work for you? What happened to you that you did not foresee?"

Experts say the answer to those questions start with defining your readiness for the change. That's a decision that should encompass physical, financial and emotional readiness, according to a set of reports based on focus groups with farmers from the Rutgers University New Jersey Agricultural Experiment Station entitled "Later Life Farming."

"Retirement plans aren't one-size-fits-all, and there is no 'right' time to retire, if ever. If working on a farm (or anywhere else) makes you happy, as well as more financially secure, there is absolutely no reason, other than perhaps poor health, to stop," according to the report that sought opinions on the topic from that state's farmers, many of whom said farming is "in their blood," making the retirement decision a difficult one.

The financial consideration's a major one when deciding when to retire from the farm. By that point in life, you've likely pulled together a sum of money from which you can draw living expenses. But, if you feel like you've yet to reach the point where that's sustainable, you also need to remain aware of the potential pitfalls of continuing to work on the farm. In other words, with age comes mounting challenges to doing the work that was once easy.

"The only caution about working in later life is to be realistic about how long you will be physically able to farm when making retirement savings calculations," according to the Rutgers report. "The activities that someone is able to do at age 85 are likely to be very different from what they can do at age 65 or 70."

A few key questions to ask yourself, according to the Rutgers report, when gauging your retirement readiness include:

  • Where do I plan to live?

  • How do I plan to spend my time?

  • How do I envision relationships with family and friends?

  • Do I plan to work full-time, part-time or as a volunteer?

And, don't overlook the gratification you get from your work on the farm: "For many people, work is also a big source of satisfaction. As one farmer in a focus group stated 'Farming kind of becomes a lifestyle. It puts meaning in your day,'" the Rutgers report says.

Phase it in

One option for retirement from your farm work can be handling it in steps or phases. This is a good option, experts say, for farmers who have a clear succession plan in place that allows them to transfer some daily duties to the younger generation, like Farm Business Talk's sw363535.

"The next generation is here, ready and getting better at it every day. I am proud of 'em," he says.

If you've reached that point and are ready to pull the trigger, try looking at the jobs on your farm that would most make your life easier if passed on to the next generation.

"This is a very individual process that varies from farm to farm. It brings up emotional issues as well as financial ones and if not approached carefully can result in a lot of hard feelings," according to the Rutgers report. "It is important to have a meeting of all family members involved in the process and develop a clear plan of responsibilities."

But, it's not always a family member. Gradually easing into retirement alongside a non-family successor can have major benefits if carried out the right way. "you can gradually retire, and the new owner can gradually become the farm owner. It is important to have a clear understanding, with a binding written legal contract, of how this transfer will take place," the Rutgers report states, adding downsizing or selling off equipment, land or animals can be another way to make the transition into retirement a gradual one.

A big key to making a phased-in retirement successful goes beyond money and work. It's more about keeping yourself engaged, whether it's in that part-time farm work you continue to do, or a new venture or hobby, farmers say.

"It's very easy to become bored in retirement. Make sure you develop other interests to keep you occupied but playing cards or pool in a camp ground doesn't do it for me," says Farm Business Talk senior advisor kraft-t.

For some, those interests may continue to be farm work. Farm Business Talk contributor and friend 40101444105 says he's "semi-retired" but still drives a grain truck during fall harvest and continues to work on his farm's machinery, including 2 classic tractors he's restoring.

"I guess when your family farms, you never really fully retire," he says.

For others, it's an all-out hobby off the farm. They may continue to have a hand in farm operations at key points during the year, but less of an overall management role.

"In retirement, we purchased a small travel trailer. Liked it so much that we now have a diesel pusher. Been in all 50 states except Arizona and Hawaii. Have been to Alaska twice," adds Farm Business Talk senior contributor old man, who at 88 years old eventually phased out his role on the farm after his daughter and son-in-law took over the operation. "Best advice that I can give in a situation like we were in is to learn to 'Shut up. Give advice sparingly and only when asked.' If I hadn't [retired], I would probably be in a wheelchair. You have to give up control sometime."